- Basic Thinking on Corporate Governance
- Structures in Place for Corporate Governance
- Internal Control System
- Policy for deciding the amount of remuneration for directors and corporate auditors
Basic Policy on Corporate Governance
One of the most important management issues for TOMY Group today is maintaining the trust of our stakeholders while offering continual improvements in corporate value and building on sound and transparent management practices. We will make every effort to achieve this through strong corporate governance including enhanced self-check functions, risk management and compliance system, even as we improve operational efficiency.
Structures in Place for Corporate Governance
- TOMY Company, Ltd. (hereafter“TOMY”) has adopted an auditor system
- TOMY’s director and audit & supervisory board members system consists of 6 directors and 4 audit & supervisory board members (including 2 outside directors and 3 outside audit & supervisory board members).
Systems for Performance of Duties by Directors
- 1Regular meetings of the Board of Directors shall be convened once each month, while extraordinary meetings of the said Board shall be held as deemed necessary. These meetings shall be used to determine basic policies and strategies for the TOMY Group as a whole, as well as issue decisions concerning the performance of important business operations, to audit and supervise the performance of business operations and take other relevant steps.
- 2Each Officers Meeting (the “Toukatsuhonbu-Kaigi”) has been established and shall be held, in principle, at least once each month with the purpose of conducting the Group’s business operations and management in smoother and more efficient fashion. The Members of the Meeting shall engage in versatile decision-making on matters concerning the overall implementation of Group business management.
The resolved matter of the Executive officers Meeting shall be reported to the Board of Directors / the Monthly Report meeting from Managing officers Executive(the “Keiei-Shikkou-Houkokukai”), composed of directors and audit & supervisory board members, as deemed necessary.
- 3The Board Director Nominating Committee and the Remuneration Committee, composed of outside directors and/or outside audit & supervisory board members, is established as an advisory body to the Board of Directors and is requested to provide proposals and counsel with regard to policy relating to matters such as the amounts of directors' assessment, appointment and remuneration.
- 4The Advisory Committee, composed of outside directors and/or audit & supervisory board members has been established as an advisory body to the Representative Director, and is requested to render a broad range of counsel pertaining to the effectiveness of business performance, the reliability of the TOMY Group’s financial affairs and other important matters.
- 5The Excecutive Officer Assessment Committee, composed of full-time directors, is established as an advisory body to the Representative Director and is requested to provide proposals and counsel with regard to policy relating to matters such as the Excecuive Officers' assessment.
- 6Delegation of authority and other steps taken through the establishment of the “Executive officer system” shall be advanced to achieve greater speed and efficiency in the performance of business operations in all managing divisions, under the policies, strategies and supervision of the Board of Directors.
- 7The Mid-term Management Plan shall be established to clarify the basic strategies and management goals over the medium term, with specific measures implemented for the purpose of achieving those goals based on the Business Plan (Budget) for each fiscal year.
- 1Upon the occurrence of matters capable of causing serious losses to TOMY Group (or the threat of the occurrence of such circumstances), the detection of illegal or dishonest actions perpetrated by officers or employees or other conditions requiring reports to the Audit & Supervisory Board, directors or employees shall promptly report upon the said situations to the Audit & Supervisory Board.
- 2The audit & supervisory board members shall use attendance at regular important meetings, irregular meetings and other occasions to receive reports on management conditions, as well as the status of business performance, financial affairs, internal audit implementation, risk management, compliance and other matters.
- 3It is prohibited that any officer or employee of the Group who made reports to audit & supervisory board members is treated unfavorably on the grounds of his/her reporting, and officers and employees of the Company and Group companies shall be kept informed of it well.
- 4A certain amount of annual budget shall be secured for expenses and other liabilities arising from the execution of duties by audit & supervisory board members. Audit & supervisory board members may charge the company they belong to for any expenses necessary for the execution of their duties, and the company shall pay accordingly. Audit & supervisory board members may consult Accounting Auditors and attorneys as needed, and the company they belong to shall bear the related expenses.
- 5To ensure that the audit & supervisory board members maintain a firm grasp of the status of important decision-making and the performance of business operations, systems shall be adopted to enable the audit & supervisory board members to attend meetings of the Board of Directors, and other important conferences; have access to the minutes of meeting proceedings, circular memos for staff approvals and other documents concerning the performance of important business operations; and be able to request explanations of such matters from directors or employees as deemed necessary.
- 6The audit & supervisory board members (or the Board) shall engage in exchanges of opinions and information with accounting auditors and the Internal Control & Audit Group and the Group Companies' audit divisions with regard to important themes pertaining to auditing and other matters, mutually collaborating to monitor the TOMY Group’s internal control conditions.
- 7When deemed necessary by Audit & Supervisory Board, employees shall be assigned to assist with the duties of audit supervisory board members. Assignment, reassignment and other situations of the employees assisting in the duties of the Audit & Supervisory Board shall be conducted with the prior consent of audit & supervisory board members, and such employees shall perform their operations under the direction and order of the audit & supervisory board members to ensure the independence of such employees from directors.
Internal Control System
One of the most important management issues for the TOMY Group today is maintaining the trust of our stakeholders while offering continual improvements in corporate value built on sound and transparent management practices. We will make every effort to achieve this through enhancing corporate governance and continually improving internal control systems.
- 1 have been established to clarify that all officers and employees in the organization must not only comply with existing laws and ordinances, but also strive through the implementation of sincere and fair corporate activities to fulfill their social responsibilities. These rules are accompanied with thorough efforts to achieve the widest possible understanding of this stance on the part of officers and employees.
- 2To both enhance and achieve greater thoroughness for TOMY Group’s compliance system and risk management system, an arrangement has been adopted in which the Risk/Compliance Committee, a body chaired by President & CEO and composed of outside directors and outside audit & supervisory board members and others, has been established to deliberate on the important issues concerning risk and compliance, and report upon the results of those discussions to the Board of Directors.
- 3The Internal Control & Audit Group, an organization under direct control of the President & CEO, shall audit the status of compliance in the Company and Group and report on the results to the Representative Director and The Audit & Supervisory Board as deemed necessary.
- 4No relationships of any kind shall be maintained with anti-social groups or organizations that threaten social order or the sound activities of TOMY Group, while systematic responses shall be mounted with a firm stance to unreasonable demands and similar situations.
- 5In the event of emergencies such as the occurrence of large-scale purchasing of TOMY shares, the Board of Directors shall establish a Special Committee composed of outside directors and/or outside audit & supervisory board members, shall give the utmost respect to each such Committee's investigation and evaluation of the nature of any such purchasing and to the Committee's advice as to the necessity for the initiation of countermeasures against the purchasers, and shall decide policy for addressing the situation.
- 1The Risk/Compliance Committee and the Internal Control & Audit Group have been established as the organizations assigned to coordinate all areas of risk management, thereby creating a company-wide risk management system integrated with the internal control system.
- 2To deal with the occurrence of unexpected circumstances, Risk Management Task Forces shall be promptly established, with prompt and precision actions taken to both minimize losses and damages and effective measures devised to prevent recurrences of such situations.
- 3The Environment Dept. President Office and the Safety & Environment Assurance Office have been established as an organization to deal exclusively with the environment and product safety, with efforts being advanced to strengthen the process of dealing with environmental problems and offering outstanding products that can be used with confidence.
Information Management System
- 1Information pertaining to the execution of duties by directors shall be recorded and preserved in document or electromagnetic media form, in accordance with the TOMY Group’s internal guidelines.
- 2The Information Security Basic Rules has been determined pertaining to the management of information, with measures devised to ensure the reliable protection of information assets, including personal information.
- 3Strengthening of the disclosure system shall be undertaken in the pursuit of speedy information disclosure and greater transparency throughout the TOMY Group’s management.
Group Business Management System
- 1As a general rule, one or more of the TOMY’s officers or employees shall be appointed as outside directors or outside audit & supervisory board members of the TOMY Group companies. In this capacity, these outside directors and outside audit & supervisory board members shall engage in monitoring and supervision of the appropriateness of the performance of the business operations at each such company, thereby striving to strengthen the risk management and compliance system of the TOMY Group as a whole.
- 2With regard to the TOMY Group management system, a department shall be established to oversee Group company management. This department shall act in accordance with the TOMY Group’s internal rules and guidelines in advancing management and guidance activities in response to the characteristics and conditions of each Group company.
- 3Group-wide related rules shall be prepared with regard to compliance, risk management, information management and other areas, with efforts made to foster awareness of compliance throughout the entire Group and establish a risk management system in reflection of the company-wide perspectives, while such systems are being monitored by the Risk/Compliance Committee and the Internal Control & Audit Group.
- 4Each Group company shall report the progress of its profit plan and other matters at the Group's Monthly Briefing Session, which is held regularly on a monthly basis.
Ensuring financial report reliability
- 1To ensure the reliability of financial reports, a specific internal control system shall be established for the purpose of preparing pertinent regulations and the effective and appropriate submission of internal control reports in accordance with the Financial Instruments and Exchange Law.
- 2Continuing evaluations shall be conducted to ensure proper functioning of the internal control system, with implementation of required corrections in cases of deficiencies to uphold compliance with the Financial Instruments and Exchange Law and other related laws and ordinances.
With regard to the basic policy of the internal control system of the Company, please refer to
Policy for deciding the amount of remuneration for directors and audit & supervisory board members
Concerning remuneration for directors and audit & supervisory board members, it has been decided by resolution of the General Meeting of Shareholders that the amount of remuneration to directors as a group is capped at \400 million per annum (fixed remuneration) and the amount of remuneration to audit & supervisory board members as a group is capped at \70 million per annum (fixed remuneration).
Additionally, it has also been decided by resolution of the General Meeting of Shareholders that the maximum amounts of remuneration etc. relating to subscription rights to shares issuable as stock options are \200 million per annum for directors as a group and \15 million per annum for audit & supervisory board members as a group for the one year period beginning from the date of the Ordinary General Meeting of Shareholders for each fiscal year.
The actual amount of remuneration etc. to each director and each audit & supervisory board members shall be based on the deliberation and report of the Remuneration Committee, which consists of outside directors and outside audit & supervisory board members, and decided by resolution of the Board of Directors for a director's remuneration or by consultation of Audit & Supervisory Board for a audit & supervisory board member's remuneration.